by Michael J. Fork
This has been a busy and exciting year for IBM’s cloud business. In February, we unveiled our $1 billion investment in our platform as a service, Bluemix. April saw the launch of the IBM Cloud marketplace, and throughout the year we announced strategic partnerships with SAP, Apple, Intel, Microsoft, and AT&T among others. In the last two weeks alone, we’ve announced more than $4 billion in multi-year enterprise cloud agreements.
What underpinned these advancements and made them possible? Our first, and biggest, investment of the year: $1.2 billion to build out our network of worldwide data centers.
As we rapidly approach the new year, the 2014 data center expansion continues. Over the next two weeks, IBM Cloud will bring online three new facilities across the globe, Frankfurt, Mexico City, and Tokyo. This brings our total to 40 cloud centers with 12 new locations worldwide.
Additionally, we announced a strategic partnership with Equinix to provide direct access to SoftLayer cloud services via Equinix Cloud Exchange.
Why does this matter? Simple: Sovereignty and Speed.
In response to government spying, high-profile hacks, and the realization that data is the next “natural resource,” more and more governments are adopting “sovereignty” laws that are intended to keep data in-country and dictate how it is handled (especially personal data). These laws typically specify what data can (and cannot) be stored outside the country, how it must be stored, who can access it, and the audit trails that must be maintained.
Complying with these laws can often only be accomplished with an in-country presence. Recognizing this, IBM is aggressively expanding its cloud footprint and now has data centers in every major financial market around the world—by far the most of any major cloud service provider—significantly reducing the barrier to entry. What used to take weeks or months through a data center build out or find a co-located or managed hosting provider can now be done with just a credit card in as little as a few minutes. That is the power and value of a cloud provider with a large geographic footprint.
The other major reason why an in-country presence matters is speed. Simply put, shortening that last mile gets clients to the user more quickly. The difference between success and failure comes down to the ability to engage the user, and sustained engagement requires delivering a customized experience that adapts to their needs in real-time.
While this is a necessary condition, it is not sufficient. Clients also need to do it faster than their competition. Locality service may have correctly identified that a user was approaching a client’s store and sent them a coupon before they got to their door, but they lost the sale when their competitor across the street identified them faster and caught them at the streetlight to cross over. Storing and processing data at the “edge”—in other words, as close to the user as possible—minimizes latency and round-trip times from the client device, giving them a distinct edge on the competition. The more data centers and countries covered, the larger their potential user base that can be optimally served. This is the power and value of a large geographic footprint.
Follow Michael J. Fork on Twitter @mjfork